WASHINGTON – The Biden administration told Nippon Steel in a letter on Saturday that its $14.9 billion acquisition of United States Steel (NYSE: X) would pose a national security risk by harming the American steel industry, three people said, adding to evidence the U.S. is poised to block it.
The deal faces opposition from numerous Democrats and Republicans, with Vice President and Democratic presidential candidate Kamala Harris saying on Monday she wants United States Steel to remain “American-owned and operated.” Her Republican rival Donald Trump has pledged to block the deal if elected.
In the letter, which has not been previously reported, the Committee on Foreign Investment in the United States (CFIUS) said the deal would damage American steel production and decrease the likelihood that United States Steel would continue to aggressively seek trade remedies, the people who were familiar with the matter said, adding that the companies were given until Wednesday to respond.
“The committee has identified risks to the national security of the United States arising as a result of the transaction,” the letter said, according to one of the sources.
In their written response, excerpts of which were shared with Reuters, the companies echoed concerns revealed publicly by United States Steel on Wednesday. “Rejection of this transaction will lead to the idling of U.S. Steel’s blast furnace facilities; … likely cost thousands of jobs; and ultimately weaken the quality and resiliency of steel supply to U.S. industries.”
The U.S., they added, was “acting in this matter not based on the facts, the law, or the United States national security interests, but based on politics and the cynical exploitation thereof by third parties.”
The White House declined to comment. The Treasury Department, which leads CFIUS, did not respond to a request for comment.
Spokespeople for Japan’s Nippon Steel and United States Steel declined to comment on the letter but referred Reuters to prior statements arguing that the deal does not create any national security concerns and would strengthen the U.S. steel industry.
“We fully expect to pursue all possible options under the law to ensure this transaction, which is the best future for Pennsylvania, American steelmaking, and all of our stakeholders, closes,” the spokesperson for United States Steel added.
Nippon Steel shares were up 0.8% around midday on Thursday. United States Steel (NYSE: X) shares closed down 17.5% on Wednesday.
(Source: Reuters)
